Spanish government bonds rose, pushing 10-year yields to the lowest in more than eight years, after European Central Bank President Mario Draghi said further gains in the euro would trigger more monetary stimulus.
Late last Friday, billionaire Patrick Drahi put the bankers he assembled to finance a $23 billion bid for Vivendi SA’s French phone unit on the spot. He wanted to increase the cash portion of his offer by more than $2 billion, with a record amount of loans giving lenders little protection if the fortunes of the combined company diminish.
U.S. stocks fell, with the Nasdaq Composite Index sinking the most since 2011, as technology shares resumed a selloff on concern valuations are too high as earnings season begins. Treasury rates sank to a three-week low on speculation interest-rate increases won’t be accelerated.
Europe’s peripheral countries are on their way to catching up with Germany in the bond market for the first time since 2010. While Mario Draghi is winning the plaudits, there’s also the U.S. economy to thank.
Junk-rated companies in Europe risk damaging their credit quality as demand for leveraged loans and high-yield bonds outstrips supply, allowing greater borrowing with fewer lender protections, according to Standard & Poor’s.